How to Decentralize Eminent Domain Powers

In the wake of the Supreme Court's Kelo decision on eminent domain, many pro-centralization libertarians complained that the Supreme Court should have outlawed state and local government authorizations of eminent domain.

This was the wrong approach. The correct approach is to support the decentralization of eminent domain powers — and then to outlaw eminent domain at the state and local level.

The idea that some remote government thousands of miles away ought to be micromanaging local affairs is not a libertarian idea. Lew Rockwell explains[1]:

And yet stealing isn't the only thing libertarians are against. We are also opposed to top-down political control over wide geographic regions, even when they are instituted in the name of liberty.

Hence it would be no victory for your liberty if, for example, the Chinese government assumed jurisdiction over your downtown streets in order to liberate them from zoning ordinances. Zoning violates property rights, but imperialism violates the right of a people to govern themselves. The Chinese government lacks both jurisdiction and moral standing to intervene. What goes for the Chinese government goes for any distant government that presumes control over government closer to home.

Thus, the Supreme Court in Kelo ruled the right way.

In the wake of Kelo, what should have happened did happen in many states.

In Indiana, for example, the state government explicitly outlawed the kind of eminent domain that the Kelo decision allowed. Even better, this Indiana law has proven to be a key factor in a recent landgrab[2] by a city government in Indiana:

If there were any doubt about the illegitimacy of the City’s efforts to compel property transfers to a private developer, Indiana’s eminent-domain reform settle the matter in the favor of the Plaintiffs. In 2005, the United States Supreme Court held, in Kelo v. City of New London, that the Fifth Amendment to the Constitution permits government to take private property for the mere purpose of promoting economic development. Less than a year later, Indiana enacted a comprehensive reform statute rejecting the Kelo decision as a matter of state law. The statute prohibits the transfer of property seized by eminent domain to other private parties except under narrow and enumerated circumstances. Under the new law, the fact that property happens to be located in “an area needing redevelopment” is not a justification for transferring it to another private party… Indiana has therefore rejected the kinds of completed transfers that the City is attempting in this case.

So, it seems the intervention of the Federal government wasn't necessary after all.

Nevertheless, whenever some special interest group has a particular pet project, it always wants the federal government to step in and throw down a nationwide ban or mandate overriding all local inclinations and concerns. This is why the slavedrivers of old wanted nationwide fugitive slave laws. It's why modern-day interventionists want a nationwide minimum wage and nationwide gun laws.

Otherwise, an interest group might have to go around the country convincing people to adopt the laws they favor. What a hassle! When you're a huge wealthy interest group, it's much better to just have the federal government hand down a coercive mandate. Problem "solved."